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Farley v Skinner – 2001

March 05, 2024
Micheal James

Jurisdiction / Tag(s): UK Law

Introduction to Farley v Skinner:

Farley v Skinner [2001] UKHL 49, decided by the House of Lords in 2001, is a landmark case in English contract law concerning the measure and availability of damages for distress. The case revolved around Mr. Farley’s claim against Mr. Skinner, a surveyor, who failed to investigate aircraft noise near a property Mr. Farley intended to purchase.

Facts of the Case

Mr. Farley commissioned Mr. Skinner to conduct a survey of a property he planned to buy. He specifically requested an assessment of aircraft noise, a major concern due to the property’s proximity to an airport. Mr. Skinner failed to investigate the noise levels, and Mr. Farley, unaware of the issue, proceeded with the purchase. Subsequently, the significant aircraft noise significantly interfered with Mr. Farley’s enjoyment of the property, causing him distress and discomfort.

Legal Issues

The central legal issues were:

  • Can damages be awarded for non-pecuniary losses (distress) in breach of contract cases? Traditionally, only financial losses were recoverable in such cases.
  • Does the recovery of damages require proof of physical discomfort? Mr. Farley’s suffering was mainly mental and emotional distress.
  • How significant is the loss of amenity in awarding damages? The noise negatively impacted Mr. Farley’s ability to use and enjoy his property.

Arguments of the Parties

Mr. Farley:

  • Argued that Mr. Skinner’s breach of contract directly caused his distress and loss of amenity.
  • Claimed that damages should be awarded to compensate for his non-pecuniary losses, even without financial loss.
  • Contended that proof of physical discomfort was not necessary, as the contract aimed to protect enjoyment of the property, including mental well-being.

Mr. Skinner:

  • Argued that awarding damages for distress would open the floodgates to speculative and difficult-to-quantify claims.
  • Opposed recovering damages for non-pecuniary losses, maintaining that it should be limited to financial losses arising from the breach.
  • Contended that Mr. Farley should have investigated the noise himself and could not claim financial loss due to prior knowledge.

Judgment and Rationale

The House of Lords, by a majority, ruled in favor of Mr. Farley. They held:

  • Damages could be awarded for non-pecuniary losses directly caused by breach of contract, even without financial loss.
  • Proof of physical discomfort was not essential, as distress impacting enjoyment of a property was compensable.
  • The loss of amenity, including the ability to peacefully use and enjoy the property, was a significant factor in awarding damages.

The court based its decision on the fundamental principle of putting the injured party in the same position as before the breach. This extended to compensating for intangible losses stemming from the breach, as long as they were foreseeable and directly connected.

Impact of the Case

Farley v Skinner significantly impacted contract law concerning damage awards:

  • Established the recoverability of non-pecuniary losses like distress under certain circumstances.
  • Broadened the scope of “amenity” beyond purely physical aspects to include mental and emotional well-being.
  • Provided a framework for assessing distress-related damages based on foreseeability and direct connection to the breach.

This case sparked debate and further legal developments regarding the limitations and boundaries of awarding non-pecuniary damages in contract disputes.

Conclusion: Farley v Skinner stands as a landmark case, expanding the scope of compensation available in breach of contract claims. It recognized the potential for non-pecuniary losses and established a framework for their recovery, balancing fairness with practicality and potential abuse. The case continues to have significant influence in contract law and the ongoing discussions surrounding the nature and limitations of damage awards.

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